Andy’s view
Historically, iconic cars have been powerful symbols of a country’s industrial coming-of-age. Think of the Ford Model T, or the VW Beetle. Japan signalled its post-war economic comeback with a sports coupe – the Toyota 2000GT, immortalized in the 1967 James Bond movie You Only Live Twice.
For China today, that may be the Kosmera Nebula 1, an ultra-luxury EV from Dreame (pronounced “dream-e”) Technology that recently stole the show in Las Vegas at the Consumer Electronics Show, the world’s premier tech event.
It wasn’t just the Nebula’s astonishing performance that drew huge crowds — the quad-motor powertrain is said to generate a staggering 1,900 horsepower, delivering 0-60mph in 1.8 seconds — but the manufacturer itself: Dreame is a home appliance maker, best known for its robot vacuum cleaners.
The Nebula may be styled like a Bugatti, with acceleration to match, but it has as much in common with Dreame’s high-tech suction devices: Both are powered by high-speed digital motors, both deploy aerospace-grade composite materials, and both are the product of precision 3D printing technology. There are similarities, too, in their cooling systems and AI-driven navigation.
Indeed, the Nebula writ large heralds China’s dominance over the industries of the future, the product of an integrated manufacturing ecosystem that enables seamless crossover between industrial sectors. Perhaps unsurprisingly, Dreame is funded by Xiaomi, a Shenzhen-based tech giant which itself made the leap from consumer electronics products, like smartphones, to EVs. Apple, by comparison, tried for a decade to build an EV before giving up.
Upstream, China’s high-tech manufacturers rely on the same specialist supply chains for parts that fit into different products; downstream, they utilize the same distribution networks to reach customers. The system produces unbeatable economies of scale — and drastically lowers costs.
Dreame says it will start commercial assembly of the Nebula in 2027 in a factory in Berlin, although it hasn’t announced a retail price. Entry-level EVs in China start at around $5,000; the Geely M9 SUV, also exhibited at the Las Vegas show, offers a family-sized three-row interior at just $28,000. At those prices, European automakers are hard-pressed to compete, even with tariffs on EVs set as high as 35%. The US shuts out Chinese EVs with 100% levies.
A recent OECD report said Chinese subsidies to EV makers, including grants and cheap loans, are up to nine times higher relative to revenues than those in rich countries. But that’s only part of the story driving their success.
Behind China’s competitive threat to Western economies is a centralized industrial policy, coordinated by an authoritarian government, that has upended traditional notions about how innovation works.
Forget about the “democratic advantage.” China has put paid to the idea — long cherished among Western political theorists — that only free minds in open societies can truly innovate, and that, sooner or later, authoritarian regimes like China’s will stall out. “We got this wrong,” says Jennifer Lind, a professor at Dartmouth College whose book Autocracy 2.0 makes a convincing argument that China has become a technological superpower by recalibrating its repressive political impulses.
Faced with what has long been seen as a binary choice — to be poor and authoritarian, or rich and lose power — Lind says that China’s Communist Party leaders found a third way: “Try to maintain as much political control as you possibly can, while allowing as much freedom as you can to permit innovation.”
Lind calls this “smart authoritarianism,” and it’s beating Western models. The Australian Strategic Policy Institute, a think tank, says that China is winning in 57 of 64 key technology areas, reversing decades of US dominance.
By now, China has locked in its industrial advantages. Kyle Chan, a fellow at the Brookings Institution who researches China’s industrial progress, says that the country’s overlapping industries — EVs, robotics, batteries, AI — create a mutually reinforcing feedback loop. “As China becomes stronger in some industries, this tightens its grip on others,” he writes in his newsletter, High Capacity.
Dreame embodies what Chan calls the “Swiss Army knife” nature of China’s technology champions. Its corporate slogan is a fitting tribute to the system that nurtured its ambitions: “All Dreams in One Dreame.”
Room for Disagreement
There’s a big gap between a concept car, like the Nebula, and a commercially produced vehicle, especially one that’s aimed at the European market that maintains high safety standards and where drivers demand precise handling as well as performance. The Nebula’s uncanny resemblance to a Bugatti has also raised eyebrows.
Still, it took Xiaomi only three years from announcing its SU7 to unveiling the vehicle — and in its first full year of production last year ramped up to 40,000 vehicles per month. Michael Dunne, the CEO of Dunne Insights, an advisory firm, told CNBC that this was “the most explosive growth” we’ve seen in the auto business in a hundred years.